Are Home Buyers Liable To Pay For Fungible FSI? Here’s Why Not

The Property Show on NDTV | March 17, 2016

When the Municipal Corporation of Mumbai changed the Development Control Regulations (DCR) in 2012, open spaces such as flower beds and balconies which came under ‘fungible’ Floor Space Index (FSI) were converted into regular FSI. Many builders who had paid a premium to buy fungible FSI decided to recover their costs from you, their customers. They wait until your house is ready and then present you with ‘extra’ charges for the ‘extra’ space in your flat. If you refuse, you could end up losing your home.

Experts say this is illegal and unethical. If your builder asks you to pay up for fungible FSI, here are the top 5 reasons why you should say no.

1 – The rule is prospective, not retrospective
Like most legislations, this amendment in the DCR is prospective. This means it is applicable only from the date of notification, that is 6th January, 2012. So if your project was launched before that, you are not obligated to pay any charges to the builder.
2 – You signed up for a particular area
When you sign the ‘buyer-seller’ agreement, you have basically signed a contract to pay a particular amount for a specified area. The builder cannot force you to pay more for any extra area which he may have added onto the flat because of the change in DCR.

3 – You have to agree to the change
Once the DCR changed, did the builder consult with you adding more space to your home? If he didn’t, you are not liable to pay extra money for any changes you were not aware of. According to Section 7 of the Maharashtra Ownership of Flats Act (MOFA), a builder cannot amend the apartment plan without the consent of the buyer.
4 – It is not ethical
The builder can always sell excess FSI and make a profit, but the home buyer has no such option. What’s more – changes in policy, rules, regulatory hurdles etc. are part of the risks of business and builders cannot get away from it by passing the costs onto home buyers, who have already sunk their life’s savings into their home.

5 – You have the right to refuse
As a buyer you have certain rights. Just because something is available doesn’t mean that you have to take it. Nor can the builder say he has given you more space and force you to pay for it. If the builder forces you, or makes you sign a one-sided agreement, immediately take the builder to court and contest these charges under MOFA.
Aswhini Priolker, Reporter, NDTV